The Water Authority’s Debt Question

By Walker Boyd

Ticky-Tacky by sarahgoldsmith on Flickr

In early 2009, the authoritative ratings agency Moody’s assigned an ‘Aa2’ rating to the Albuquerque Bernalillo County Water Authority (ABCWUA). This is good news for the Authority: the high rating ensures low interest rates on any bonds they might issue.

And they have been issued: If the ABCWUA is a house, then it is mortgaged to the hilt: the Authority has about $2000 in debt for each one of its customers.

It is strange to read about the Water Authority from the perspective of national or international bond investors. Instead of water availability, Colorado River flows above El Vado, or average customer use, Moody’s analysts were more concerned about “customer growth” and the effect that slowing construction of new residences might have on the Authority’s short-term growth.

This dovetails with another favorite past-time of financial analysts, real estate speculation. Because tax increases are so unpalatable to Americans, city governments are often hamstrung by their own success. Low taxes attract businesses (for example Intel), but higher taxes to pay for deferred costs like water use and street improvements are politically unpalatable. Speculators can thus count on friendly city managers, willing to do anything to attract business to their own city in order to attract “jobs”. But how does a city with a complete inability to raise taxes or utility rates continue to provide essential services?

Until recently, the solution has been Gross receipts: So long as Albuquerque continues to grow at a healthy pace, property sales and construction give the state a steady flow of income.

Any city manager is thus faced with a unique problem: how do you keep up with increased demands for government services (like better water treatment) without raising taxes? Until now, the solution has been to grow, and when growth has been anemic, issue bonds. Hence the concern with growth that the Moody’s analysts linked above express. Anything less than 2% growth means that Albuquerque becomes a debt basket case in record time.

There is nothing inherently wrong with bonds; the ability to efficiently distribute wealth has been a hallmark of Western society’s growth since the 16th century. Conservative historians argue that the Italian invention of double-entry book keeping and other European innovations in finance and accounting are responsible for the Western world’s higher quality of life. When growth is desirable, bonds can help a city or a country build necessary infrastructure, which they pay for later with a larger, more productive population.

But in a city like Albuquerque which has already seen its fair share of development, bond issues can take on a pernicious role, encouraging growth for its own sake rather than Albuquerque’s general well-being.

Continue reading

Electronic Bootstraps: A Local Town Hall on The Importance of Keeping the Internet Free and Accessible to All

By Tracy Dingmann

Making and keeping the Internet affordable and accessible to all people is now the great equalizer in a world that increasingly depends on online communication.

People in New Mexico’s many rural and underserved communities know far too well that keeping the Internet free and open is crucial if people are to get the same educational, health, and business opportunities as everyone else.

The Internet is essential, and all of us need access to these new “electronic bootstraps” in a world where such crucial things as job applications, governmental forms and even filing a complaint with your local police department MUST be done online.

Right now, big cable and telephone companies are trying to dominate the conversation on the future of the Internet. They are trying to convince Congress and the American public that private, corporate control of the Internet is needed to insure the viability of this now public medium.

Continue reading

Honor Indigenous Day; Help Kewa Pueblo

A Guest Post by Anthony Fleg

Today, as our country officially celebrates the “discovery” of a land already inhabited, I think it is a great time for New Mexicans to reflect on, and honor the past and present struggles for control of our land.

Let me start with a quick story: This past weekend, I had the opportunity to be a part of the volunteer crew organized by the Kewa (formerly Santo Domingo) Pueblo to begin to repair the significant damage done to the Tribe’s traditional houses by the October 2nd hailstorm. Many homes have been deemed “un-inhabitable” and Kewa officials estimate that 90% of the homes in the old village have suffered damage to their roofs.

The damage there is significant, but even more heartbreaking was the reality that as of Sunday afternoon, over a week from the storm, very little attention had been given to the situation from beyond the Pueblo. Tribal leaders had yet to hear from our state government in their request to have a state of emergency declared.

As we shoveled mold-ridden clothes from a house, where the water line rose to my knees (giving me eerie flashbacks to post-Katrina Louisiana), a fellow volunteer remarked, “I think this situation will serve as a good lesson for the Tribe.”

Huh?

Continue reading

Pajarito Water Station Opens Saturday

It took years of organizing and hard work, but on Saturday, about 400 families living on Pajarito Mesa west of Albuquerque will finally get access to clean drinking water.

For about 20 years, the residents of the unincorporated area have had to buy water and haul it to their homes, from a distance of 10 to 18 miles away.

Here’s a New York Times story from last month on the rugged conditions at Pajarito Mesa – and the community’s quest for clean, accessible drinking water.

But no more – on Saturday, the community will open its own water filling station.

The official opening ceremony will happen from 12 to 4 p.m., when there will be a celebration of food and music with the people and groups who helped the Pajarito community get the well, including the Pajarito Mesa Mutual Domestic Water Consumers Association and the SouthWest Organizing Project.

Here’s a map to the area, if you’d like to attend:

pajarito mesa

Map to Pajarito Mesa Water Station

Bye Bye SunCal TIDD?

Looks like you dodged a bullet, New Mexico – this time.

The Albuquerque Journal reported Friday that the beleaguered California development company SunCal won’t seek the legislature’s approval for a tax increment development district, or TIDD, in the session that starts Jan. 19.

According to the paper, the company is currently involved in a lawsuit filed by three capital companies, who are seeking SunCal’s immediate payment of $182 million in loans it wanted to use to develop 55,000 acres of Westland property on the city’s West Side. If SunCal defaults on the loan, it will lose the land.

Creating a TIDD for SunCal would have required taxpayers to provide money upfront for providing SunCal land with roads, water and sewer lines. SunCal would have been allowed to reimburse taxpayers for the development costs later with property and gross receipts tax revenue garnered from the development.

Critics of the proposal protested the thought of more development on the West Side. After all, TIDD were originally developed to aid revitalization of inner city historic districts, not new development.

They also wondered how anyone could be sure that the SunCal would even be successful enough to reimburse taxpayers.

They noted that divisions of SunCal oversaw several failed developments in other states.

For it’s part, SunCal said its New Mexico holdings were solvent and had nothing to do with its operations in other states. I guess we know better now.

Good thing the legislature didn’t approve those TIDDS when SunCal asked for them back in 2008 or 2009, isn’t it?

From the Journal story:

The company has been denied approval for the incentives in the Legislature in the last two years.

In 2009, two tie votes in the House of Representatives stopped approval, despite a huge SunCal media campaign promoting the incentives and the company’s estimate of nearly 13,000 jobs it would help create. A year earlier, a Senate filibuster by Sen. Cisco McSorley, D-Albuquerque, stifled SunCal efforts.

SunCal president Will Steadman told the paper that the company will likely return to ask the New Mexico Legislature to reconsider the TIDD proposal “when the economy has improved.”

Let’s hope that, in fact, they’re gone for good.

Will New Mexico get its broadband chance with the Recovery Act?

(Credit: Jim Hannon/The Times Daily, via AP)

(Credit: Jim Hannon/The Times Daily)

Even though it was the United States Department of Commerce that championed the Internet as a means of universal commercial and democratic information exchange, the U.S. ranks 12-16th in broadband penetration. We are the only developed country in the world without a coherent broadband strategy. New Mexico, despite being host to such high-tech agencies as Los Alamos National Labs and Sandia National Labs, lags behind almost all other states in broadband penetration.

This was supposed to change when President Obama added $4.7 billion of spending to the 2009 Stimulus spending bill to

accelerate broadband deployment in unserved and underserved areas and to strategic community institutions that provide important public benefits.

How is this to be accomplished?

Continue reading